2015-11-10 Infrastructure & Services Committee Agenda

INFRASTRUCTURE & SERVICES COMMITTEE MEETING REPORT                            10 NOVEMBER 2015


These six capabilities are the foundations and building blocks to progressing and achieving good
decision making and successful asset outcomes for Noosa Council. It is important to identify and
develop a strategy around any shortfalls that exist within these six capabilities, as each capability
relies on the other to produce good organisational asset management.

In order to identify and implement improvements around these capabilities it will be important to
ensure there is an understanding of how the organisation is currently performing. This will identify
what can be done better to achieve good asset management consistently, collaboratively and
confidently across the organisation. It is proposed that this can be achieved through an
independent asset management capability audit to clearly define the current level of performance
and what must be done to improve on any shortfalls.

1.    Asset Management – Background

Noosa Council has been very active in asset management over the past decade. However, it has
predominately focussed on the road infrastructure and GIS (spatial data) systems. Throughout
this period there have been significant improvements with technology, new corporate systems,
changes in legislation and new international standards to support asset management practices
and as a result, asset management responsibilities have significantly broadened.

The Australian Local Government Association commissioned the National Financial Sustainability
Study, ALGA Report (PwC, 2006) which identified that 35% of councils across Australia were
financially unsustainable, and that there was a $2.16 billion funding gap to clear delayed asset
renewals. The ALGA report identified a number of issues and weaknesses that greatly impact the
financial sustainability of councils and these included:
    Valuation and depreciation;
    Poor asset management practices;
    Inconsistence application of standards and accounting approach;
    Data deficiencies;
    Lack of understanding of level of service and cost; and
    Knowledge of whole of life costs.

To maintain Council’s current financial sustainability rating, it will be imperative to continually
improve the asset management framework. As a relatively new organisation these issues are
very real threats and although they can vary in severity from low to high risks, it will be important
that a strategic and collaborative approach is developed for managing them into the future.

As a result of the National Financial Sustainability Study, a national asset management
framework was developed and recommended that:
    Councils should have a strategic approach to managing assets;
    Community engagement is essential to providing infrastructure services in a financially
      sustainable manner; and
    Councils are encouraged to define level of services, establish quality and cost standards
      for services to be delivered and regularly review the services in consultation with the
      community to determine the financial impact of a reduction, maintenance or increase in
      service levels.

Council currently has some very good asset management practices embedded in some areas
within the organisation. Since 1 January 2014, Council has:
    adopted an asset management policy;
    developed a number of high level road maps for the implementation of the asset systems
      and the next generation asset management plans; and
    developed a strong asset renewal focus within the capital works programme.


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